leading the sector six months ended 30 june 2020 interim

Leading the sector Interim ResultsSix months ended 30 June 2020

Leading the sector

Focused on doing the right thing for all stakeholders

• First PBSA provider to forgo summer term rents

• Decisive actions have enhanced our reputation with Universities, creating new partnership opportunities

EPRA earnings growth driven by Liberty Living acquisition, offset by impact of Covid-19

• EPRA Earnings +22%, EPRA EPS down 12%

Successful integration of Liberty Living

• Secured £15m p.a. of cost synergies from 2021

• Targeting additional synergies

Growing visibility over income for 2020/21

• 97% of Universities to provide in-person teaching

• Reservations at 84% (2019/20: 93%), of which half underpinned by nomination agreements

• Targeting 90% occupancy

• Anticipate reinstating dividend payments later in the year

H1 2020 H1 2019 FY 2019

EPRA Earnings £74.8m £61.2m £110.6m

EPRA EPS 20.5p 23.2p 39.1p

Dividend per share 0.0p 10.25p 10.25p

EPRA NAVps 833p 820p 853p

Total accounting return (2.3)% 6.3% 11.7%

Loan to value1 33% 29% 37%

EBIT margin 71.7% 76.0% 71.7%

Reservations2 84% 93% n/a

1. Excludes leased asset and corresponding lease liability recognised in respect of leased properties under IFRS 162. Reservations as at 27 July 2020 and 2019. Combined Unite and Liberty Living portfolio for 2020/21

2

Content

Performance Highlights

Financial Review

Property Review

Outlook

Appendices

3

Interim ResultsSix months ended 30 June 2020

Performance Highlights

7569

83 7980 7981 8083 8185 82

0

20

40

60

80

100

Customer satisfaction Higher Education trust

Customer satisfaction and University engagement

2014 2015 2016 2017 2018 2019

Sector-leading platform

High-quality, well located portfolio

• 88% aligned to strongest Universities

• 4% rise in applications to High-tariff Universities

Trusted partner to Universities

• Collected 97% of rent due from Universities in summer term of 2019/20

• Reputation enhanced through our response to Covid-19

Best-in-class operating platform

• Flexibility to rapidly adjust sales strategies and reduce costso Shift to target more domestic students and international students

already in the UK

o £12-15m of cost savings identified for 2020 (Unite share)

• First student provider to have its Covid secure status accredited by the British Safety Council

£300m placing enabling continued investment at enhanced returns

• Pipeline of three schemes for a total development cost of £250m, either contracted or under offer

• Further opportunities to add to University Partnership or development pipeline

45% 45% 40% 36% 33%

41% 43% 50% 52% 57%

0%

20%

40%

60%

80%

100%

2016/17 2017/18 2018/19 2019/20 Post pipeline &disposals

University alignment by tariff group

Medium High

Source: Unite, TRIM, Redbrick

Source: Unite, 2020 Times Rankings

5

YoY change in acceptances by domicile(18 June deadline)

Change in acceptances % YoY

UK 2,200 0.5%

EU (2,170) (5.9)%

Non-EU 5,770 11.6%

Total 5,800 1.2%

Encouraging outlook for 2020/21

6

Universities will be open for business this Autumn

• 97% will offer face-to-face teaching (Universities UK survey)

• Campuses will be open offering a range of social opportunities and student support

• Assuming no return to national lockdown

Student demand expected to be robust

• 1% growth in UCAS acceptances as at 18 June deadline

o Record participation rate for UK 18-year-olds

o YoY reduction in deferrals

• Strong UK Postgraduate demand

• Universities being proactive to secure and attract first year international students, recognising additional risk

Series of Government support measures announced for HE

• £2.7bn in tuition fee payments and research funding brought forward to ensure the viability of all Universities

• Government will cover up to 80% of losses from international students

• Committed to growth in international student numbers

97% 87% 90%

0%

20%

40%

60%

80%

100%

In-person teaching In-person socialopportunities

Plans communicated tostudents

University plans for the 2020/21 Autumn term (% of ‘Yes’ responses)

Source: Universities UK

Source: UCAS

819 715893

213 236 294

210 220 235423 456

529

0

200

400

600

800

1,000

2010 2020 2030 2010 2020 2030

000s

Forecast growth in UK 18-year-old population and number of UK acceptances to university1

UK 18 year old Other UK

University Acceptances18 year-old-population

Source: ONS, UCAS, Unite

Continued structural demand for Higher Education

7

UKUndergraduate,

1,241,000PBSA, 650,000

UK PG, 163,000

HMO, 855,500

Intl. 1st year, 268,000

Live at Home, 392,000

Intl. Other, 225,000

0

500,000

1,000,000

1,500,000

2,000,000

Demand Supply

Sources of demand and supply (2019/20)

Source: HESA, JLL, Unite

We expect strong student demand in 2021/22

• Enhanced campus experience

• Significant recovery in international student numbers

• Return to growth in the 18-year-old population

• Rising participation rates as HE increasingly viewed as a societal right

Anticipate continued flight to quality by students

• Government policy focused on quality and value of courses, favouring High and Mid-ranked Universities

o Consistent with our strategic positioning

o Very limited exposure to perceived low value courses

Outlook supportive of return to rental growth

• High-quality, affordable accommodation

• High income visibility through multi-year nomination agreements (6 year avg. WAULT)

• Anticipating a near-term slowdown in supply

• Growing opportunity to capture market share from 855,000 beds in Houses of Multiple Occupancy (HMOs)

1. Based on 2019/20 participation rate

2020/21 sales update

8

Reservations at 84% for 2020/21 (2019/20: 93%)• Later sales cycle due to some students and Universities delaying

their decision making• Targeting 90% occupancy, translating to a 10-20% YoY reduction

in income• Reservations to date show pricing increases vs 2019/20o Guidance includes contingency for price reductions and customer

incentives

Nomination reservations for 52% of beds (42% contracted)• Universities beginning to allocate students• Expect unsigned agreements to complete in coming weeks• Some Universities seeking flexibility around start dates

Broad-based demand for direct-let beds• Healthy demand from UK undergraduate studentso Expect to account for 60% of direct-let bookings vs 39% last year

• Encouraging reservations from international studentso Half of bookings from 2/3rd year students

Higher than usual risk of cancellations, particularly for international students• Guidance assumes some churn in bookings• Confirming bookings with students to improve income visibility

Current breakdown of reservations(2020/21, total group)

Status Beds % of beds to

sell

Gross rental

income (£m)

Nominations, contracted 31,442 42% 218.9

Nominations, unsigned 7,412 10% 50.7

UK direct-let 10,064 14% 61.8

International direct-let 13,713 18% 112.8

Total 62,631 84% 444.2

Current direct-let reservations by domicile and year of study (2020/21, total group)

000s UK China EUOther

intl.Total

First year 3.2 1.0 0.8 0.4 5.4

2nd & 3rd year 6.6 3.4 1.5 1.6 13.1

Postgraduate 0.3 4.3 0.2 0.5 5.3

Total 10.1 8.7 2.5 2.5 23.8

% of reservations 42% 36% 11% 11% 100%

Successful integration of Liberty Living

9

Significant progress during H1

• Liberty Living city based employees and properties integrated onto the Unite operating platform

• Liberty Living head office closed with all support functions integrated

• Unite customer offer extended to Liberty Living customers

• Integration to conclude by end of September 2020

Confident in cost synergies of £15m p.a. from 2021

• £5-6m to be realised in 2020

• Opportunities to realise additional cost synergies over time

o Reductions in water and electricity consumption

o More efficient procurement around internet, waste and maintenance

Operational learnings from the ‘best of both'

• Improved allocation and communication process for our University partners

• Established virtual sales and service centre

• Optimised marketing and social media campaigns

0

5

10

15

20

2020 2021 2022

£m Expected synergy realisation

Operating expenses OverheadsSource: Unite


Financial Review

Resilient financial performance

11

% change H1 2020 H1 2019 FY 2019

Income statement

EPRA earnings +22% £74.8m £61.2m £110.6m

EPRA EPS (12)% 20.5p 23.2p 39.1p

Dividend per share (100)% 0.0p 10.25p 10.25p

Balance sheet

EPRA NAVps1 (2)% 833p 820p 853p

EPRA NTAps1 (2)% 828p 812p 847p

Loan to value 33% 29% 37%

Cash flow

Operations cash flow (41)% £27.8m £47.0m £85.4m

Other financial KPIs

Total accounting return (2.3)% 6.3% 11.7%

EPRA EPS yield 2.4% 2.9% 4.9%

1. Reconciliation of NAV measures in appendix

Earnings impacted by summer term refunds

12

H1 2020£m

H1 2019£m

FY 2019£m

Rental income 154.9 108.3 213.9

Property operating expenses (37.5) (23.9) (53.1)

Net operating income (NOI) 117.4 84.4 160.8

NOI margin 75.9% 78.0% 75.2%

Management fees 7.7 7.2 14.4

Operating expenses (14.1) (9.3) (21.8)

Finance costs (33.5) (20.7) (43.9)

Acquisition and net performance fees - - 6.8

Development and other costs (2.7) (0.4) (5.7)

EPRA earnings 74.8 61.2 110.6

EPRA EPS 20.5p 23.2p 39.1p

EBIT margin 71.7% 76.0% 71.7%

Earnings bridge

13

EPRA earnings impacted by Covid-19

• Growth driven by acquisition of 24,000 bed Liberty Living portfolio in November 2019

• 15% reduction in income for 2019/20, reflecting our decision to forgo summer term rents for students returning home

o Loss of £27m of contracted rent in H1 (Unite share)

o Small reduction in management fees linked to NOI and GAV

• Lost income partially mitigated by cost savings

o Lower opex driven by savings in utility and broadband costs and in-sourcing of summer work

o Overhead savings from reductions to senior pay and lower discretionary spend

74.8

Earnings and cashflow guidance

14

We anticipate EPRA EPS of 22-25p in 2020, reflecting:

• 10-20% YoY reduction in rental income for Autumn term of 2020/21

o Targeting 90% occupancy

o Includes contingency for a reduction in pricing and shorter tenancy lengths

• £12-15m of P&L cost savings, in addition to £5-6m of cost synergies from Liberty Living

• Additional Covid-19 operating costs offset by efficiency savings in other areas

Earnings heavily H1 weighted given zero summer income and anticipated impact on Autumn term

Targeting further annual cost savings from 2021

• Further efficiencies in our operating model, procurement and utility costs

• £15m p.a. of Liberty Living cost synergies from 2021

Guidance assumes no return to more stringent lockdown measures and University campuses open in the Autumn, reflecting social distancing requirements

Further guidance for 2021 to be provided following start of the 2020/21 academic year

853

833

(26)

(3) (1)(3)

1 12

790p

800p

810p

820p

830p

840p

850p

860p

31-Dec-19 Covid-19

income deductions

Yield

movement

Development

portfolio

June share

placing

Cladding provision Retained

profits/Other

30-Jun-20

NAV bridge

15

2% reduction in EPRA NAV in H1

• 2.6% reduction in property values in H1 on a like-for-like basis

o Reflecting impact of rental income deductions relating to Covid-19 disruption

o Yields unchanged

• 9.5% placing in June at 870p

Swap breakage costs of £24m/6p to be incurred on repayment of Group secured debt in H2

Cash and debt facilities

16

Robust balance sheet and liquidity position

• £541m of unrestricted cash

o Eligible for CCFF but no plans to draw

• Significant headroom to withstand material Covid-19 related interruption to income

o Average cash consumption of c.£11-13m per month

• Credit approval for £100m extension of Group RCF

Continued balance sheet discipline• LTV of 33% with medium-term target of 35%• Targeting disposals in 2020 and 2021 to enhance portfolio quality

Repayment of £207m of secured debt at a 4.8% blended coupon• Swap breakage costs of £24m for £7m annual interest saving• Reduces average cost of debt to 2.8%• Resulting in a fully unsecured debt platform• Earliest Group debt maturity of November 2022

Significant headroom in ICR covenants• Occupancy would need to fall to c.55% for the 2020/21 academic

year to breach tightest covenants• Contracted nomination agreements already secured for 42% of

beds, providing visibility over income collection

UPDATE

Key debt statistics (Unite share)

30 Jun 2020 30 Jun 2019 31 Dec 2019

Net debt £1,688m £897m £1,884m

LTV 33% 29% 37%

Net debt:EBITDA ratio1 7.3 6.1 6.8

Interest cover ratio 3.3 4.1 3.5

Average debt maturity 4.6 years 5.4 years 5.4 years

Average cost of debt 3.0% 3.8% 3.3%

% investment debt fixed or capped 77% 100% 93%

1. Based on 12m historical average net debt, pro rata for completion of Liberty Living acquisition in late November 2019

£0m

£100m

£200m

£300m

£400m

£500m

£600m

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Debt maturity profile2

Group FundsSource: Unite

2. Shaded areas represent secured debt to be repaid in July 2020

Resilient performance by co-investment vehicles

Performance of USAF and LSAV impacted by disruption caused by Covid-19

• Consistent with the performance of the wider business

• Property valuations reduced by 2.2% and 1.5% for USAF and LSAV in Q1 but flat in Q2

Growth in management fees driven by increases in GAV over the past 12 months

• £489m of acquisitions by USAF in 2019

No further LSAV performance fee realised in period

• Confident in realising at least the £5.7m recognised in the 2019 results

o Reflecting conservative valuation assumptions and valuation evidence post-Covid-19

Source: Unite

17

UPDATE

Summary financials

USAF£m

LSAV£m

GAV 2,789 1,316

Net debt (854) (478)

Other assets/(liabilities) (16) (33)

NAV 1,919 805

Unite share of NAV 423 402

LTV 31% 36%

Unite stake 22% 50%

Maturity Infinite 2022/2027

Unite fees in period

Asset/property management 6.0 1.7

Acquisition fees - -

Performance fees - -

Total 6.0 1.7


Property Review

Horizon HeightsSkelhorne Street,Liverpool

-15.3%

-12.4%

-9.0%

-6.2%

-3.7%-2.6% -2.5%

-20%

-16%

-12%

-8%

-4%

0%

Leisure Retail Hotel AllProperty

Office Uniteportfolio

Industrial

Capital value growth (6m to Jun-2020)

Source: Unite, MSCI

0%1%2%3%4%5%6%7%8%

2006 2008 2010 2012 2014 2016 2018

Valuation yields

Unite Completed Portfolio IPD All Property NIY10Yr Swap Rate Prime Regional PRS NIY

Source: Unite, MSCI, CBRE

Valuations well supported

Strong valuation performance relative to wider UK real estate sector in H1

• Acquisition of iQ by Blackstone for £4.7 billion

o Underlines willingness of investors to attribute value to brand, operating and development capabilities

• Following a slowdown in activity, portfolios now beginning to transact at pricing in line with pre-Covid-19 levels

o Pricing supported by one-year income guarantees

Unite valuations: -2.6% in H1

• £ for £ reduction for lost income arising from Covid-19

• Average yield of 5.0%, unchanged over H1

o Modest yield compression in London and super prime markets

o Further increase in yields in more fully-supplied markets

Removal of material uncertainty clause for valuations of student accommodation by RICS post-period end

Targeting £100-150m of disposals in 2020 (Unite share)

• Higher levels of disposals planned for 2021 and 2022

• Capital recycling to provide funding for growth initiatives

19

2020

Development progress

20

Horizon HeightsSkelhorne Street,Liverpool L35GH

2,257 beds to be delivered across three schemes for 2020/21

White Rose View in Leeds will be completed on time and budget

• 30-year nomination agreement for 559 beds with the University of Leeds

Completion of First Way, London and Artisan Heights, Manchester delayed until Q4 2020

• Not liable for any cost overruns

• Expect to generate income through usual January intake

Expect to restart construction on 2022 deliveries in Q1 2021

• Following the start of the 2020/21 academic year

• Cost of delays expected to be £2 million

Planning approval secured for 416-bed Old BRI development in Bristol during H1

White Rose View Leeds

Significant investment opportunities

21

Current secured pipeline of 5,370 beds to deliver by 2024• £693m total development cost at 6.6% yield on cost

Placing to fund acquisition of three new sites exchanged or under offer for 2023/2024 delivery at a total development cost of c.£250m1

• All aligned to top 40 Universities

• Yield on cost 50-75bp above pre-Covid-19 levels

• Edinburgh site already exchanged (TDC of £24m)

• One Zone 1 central London site and one prime regional site under offer

Targeting enhanced returns on new developments• Anticipating reductions in total development costs• 7.5% yield on cost in London and 8.5% in provincial markets

o 100bp lower for University Partnership schemes

o New London Plan favours University anchored schemes

Capitalising on our brand and reputation to add to University Partnerships pipeline• Growing appetite for partnerships with leading operators• Increasing pressures on University finances and operations• Wide range of transaction structures being considered, including longer

nomination agreements

New opportunities for forward funded acquisitions• Regional developers facing funding pressures

Current University Partnerships pipeline

Type Beds Execution risk

Multi-year nominations Existing 11,400 Low/Medium

Off-campus development New 3,100 Medium

On-campus development New 7,500 High

Stock transfer/outsourcing New 8,000 High

Total 30,000

Current secured development pipeline

BedsTotal

Development Cost (£m)

Yield on cost

Traditional development 2,469 312 6.9%

University Partnerships 2,901 381 6.4%

Total 5,370 693 6.6%

o/w London 1,861 370 6.0%

o/w Provincial 3,509 323 7.2%

1. Subject to planning consent


Outlook

Well positioned for growth

A sector-leading business with an enhanced reputation

• Committed to delivering long-term growth in earnings and cashflow

• Continued balance sheet and investment discipline

Increased visibility following start of the 2020/21 academic year

• Intention to re-instate dividend in 2020

Continued structural demand for Higher Education

• Anticipating strong student demand for 2021/22

• Record participation rates, reflecting growing awareness of the opportunities provided by HE

• Demographics and international growth support positive outlook for the next decade

• Well positioned given increasing alignment to High and Mid-ranked Universities

Significant growth opportunities

• High-quality development opportunities at returns above pre-Covid levels

• Increasing demand for University Partnerships

• Market share gains from HMOs

23

Horizon HeightsSkelhorne Street,Liverpool


Appendices

-300

-200

-100

0

100

200

300

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(00

0s)

Cumulative change in applications byUniversity tariff

Higher tariff Medium tariff Lower tariffSource: UCAS

Student numbers remain strong

25

A UK University education is highly valued

• Unite works with 21 of 28 UK Universities ranked in top 200 globally (Source: QS World Rankings)

Strong student demand for 2020/21

• Material growth for High-tariff Universities

• Reduction in deferrals vs 2019/20

• Risk remains around international intake despite strong growth in acceptances

Record application rate for UK students

• Over 40% of 18-year-olds applied this year

• Growing awareness of the opportunities and life experience provided by University

Government targeting 115k (25%) increase in international student numbers by 2030

• Benefit from new two-year post-study visa reflected in growth in applications for 2020/21

Confident in our ability to absorb Brexit impact

• 30% forecast reduction in EU demand by 2023/24, equates to 3% of our customer base

34.7%33.3% 34.1% 35.3% 36.0% 37.0% 37.5% 37.8% 38.9%

40.5%

20%

25%

30%

35%

40%

45%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Participation rate by UK 18-year-olds(30 June deadline)

Source: UCAS

Home for Success

All-inclusive pricing

• All utilities, insurance and services

• High-speed Wi-Fi (70 Mbps)

• MyUnite app

• Maintenance teams on hand

Help when it’s needed

• 24/7 customer support centre

• Customer service teams trained in active listening

• Peer support from 160 Student Ambassadors

City-centre locations with range of price points

• Close to University campuses

• Shared living and studios

• Good transport links

Direct-let and University contracts

• Strong relationships with Universities

• Direct sales through customer website

• Unique online, mobile-optimised booking system

26

Of customers used online check-in at

available properties75%

Staff trained instudent welfare

1,000

Of maintenance fixes by the end of the

working day80%

Of customers usingMyUnite app

90%

High-quality, affordable accommodation

27

Value-for-money is the most important factor influencing students’ decisions on where to live

The cost of our accommodation is only 8% more expensive than HMO

• Equivalent to an extra £10 per week for all the additional product and service features we provide

We allow students to focus on what is important

136

113

13

10

£60

£80

£100

£120

£140

Rent Bills Service premium

Hassle free services

All-inclusive pricing for utilities, insurance & services

High-speed Wi-Fi

MyUnite app

80% of maintenance fixes by end of working day

Help when it’s needed

24/7 customer support centre with on-site security

Customer service teams trained in active listening

Peer support from 160 Student Ambassadors

Buildings designed around student needs

Close to university campuses

Shared living with ensuite bathrooms

Spaces to study and relax

* Includes ensuite and non-ensuite rooms for Unite, adjusted to 43-week average tenancy length

Source: Unite, Rightmove, Save the Student

Average weekly accommodation cost(UK excluding London)*

Unite HMO sector

Unite as a responsible business

28

Demonstrating sector leadership around Covid-19

• First student accommodation provider to forgo summer term rents for students who chose to return home

• Students able to extend their stay at no extra cost

Addressing the challenge of mental health and wellbeing

• Peer-to-peer support through our Student Ambassadors

• Collaborated on new PBSA wellbeing guide with the BPF

• Staff trained to identify potential welfare issues

Commitment to provide the safest and most secure environment for students and our people

• Five Star BSC Occupational Health & Safety audit (out of 5)

• First PBSA provider to have its Covid-secure status accredited by the BSC

Widening HE access and improving student outcomes

• Unite Foundation supporting 189 students in 2019/20

• National roll-out of Leap Skills for school leavers

Investing to improve our environmental impact

• Committed to 100% renewable energy

• Award-winning engagement programme with the NUS

• Targeting BREEAM Excellent ratings on all new developments

New sustainability strategy to be launched by end of 2020

• Providing greater transparency and accountability

• Recently signed up as a TCFD supporter

Improving performance in external benchmarks

• European sector leader for GRESB (listed residential)

• AA rating from MSCI

Portfolio overview

29

1 London

7 Newcastle

Aberdeen

GlasgowEdinburgh

Durham

5 Leeds

4Manchester

3Liverpool 6 Sheffield

Leicester

Loughborough

Nottingham

2Birmingham

Wolverhampton

Coventry

Medway

Exeter

8Bristol9

CardiffBath

Southampton

Bournemouth

Portsmouth

Reading

OxfordBedford

Geographical breakdown of portfolio

2020rank

CityCompleted beds

(20/21)Full-time student numbers (18/19)

Market share

1 London 11,591 327,840 3.5%

2 Birmingham 6,498 73,845 8.8%

3 Liverpool 6,469 51,980 12.4%

4 Manchester 5,620 66,195 8.5%

5 Leeds 5,610 59,525 9.4%

6 Sheffield 4,498 53,150 8.5%

7 Newcastle 3,763 47,845 7.9%

8 Bristol 3,753 47,345 7.9%

9 Cardiff 3,480 40,065 8.7%

10 Leicester 3,251 38,680 8.4%

Top 10 54,533 806,470 6.8%

Total 76,354

Source: Unite, HESA

10

Rental portfolio analysis

30

30 June 2020

Wholly owned USAF LSAV Lease Total Unite share

London Value (£m) 1,015 397 1,046 17 2,475 1,641

Beds 3,499 1,863 5,291 260 10,913 35%

Properties 11 6 12 1 30

Prime provincial Value (£m) 867 638 - 28 1,533 1,037

Beds 7,042 5,337 - 618 12,997 22%

Properties 16 18 - 2 36

Major provincial Value (£m) 1,151 1,470 270 29 2,920 1,639

Beds 17,324 19,506 3,067 753 40,650 35%


Provincial Value (£m) 284 283 - 33 600 379

Beds 4,958 3,520 - 1,059 9,537 8%

Properties 11 10 - 3 24

Total Value (£m) 3,317 2,788 1,316 107 7,528 4,696

Beds 32,823 30,226 8,358 2,690 74,097 100%


Unite ownership share 100% 22% 50% 100%

Value (£m) 3,317 614 658 107 4,696

Summary EPRA balance sheet and income statement

31

£m Wholly ownedUSAF

(Unite share)LSAV

(Unite share)Unite Group

Jun 2020Unite Group

Dec 2019

Balance sheet

Rental properties 3,317 614 658 4,589 4,702

Leased properties 107 - - 107 110

Properties under development 458 - - 458 412

Total property portfolio/GAV 3,882 614 658 5,154 5,225

Net debt (1,261) (188) (239) (1,688) (1,885)

Lease liability (97) - - (97) (99)

Other assets/(liabilities) (24) (3) (17) (44) (132)

EPRA net assets 2,500 423 402 3,325 3,109

LTV1 33% 31% 36% 33% 37%

Income statement H1 2020 H1 2019

Net operating income 87.4 14.6 15.4 117.4 84.4

Overheads less management fees (2.8) (1.7) (1.9) (6.4) (2.1)

Finance costs (25.7) (3.3) (4.5) (33.5) (20.7)

Development/other (2.5) (0.1) (0.1) (2.7) (0.4)

EPRA earnings 56.4 9.5 8.9 74.8 61.2

1. Excludes leased asset and corresponding lease liability recognised in respect of leased properties under IFRS 16

Debt facilities

32

Facility£m

Drawn£m

Maturity

Secured

Legal + General1 107 107 2022

Mass Mutual2 100 100 2024

Unsecured

HSBC/RBS3 350 350 2022

HSBC/RBC/RBS 400 400 2022

Unsecured bond (Unite) 275 275 2028

Unsecured bond (LL) 600 600 2024-29

Total 1,832 1,832

Facility£m

Drawn£m

Maturity

USAF

Secured bond 775 775 2023-25

Wells Fargo 150 135 2024

Total 925 910

LSAV

Wells Fargo 250 250 2022

L&G 149 149 2022

Teachers RE 140 140 2027

Total 539 539

Co-investment vehiclesOn-balance sheet

1. To be repaid on 29 July 20202. Repaid in full on 20 July 20203. Credit approval received for a further £100m extension

Reconciliation of NAV measures

33

Jun 2020£m

Jun 2020p

Dec 2019£m

Dec 2019p

Net asset value reported under IFRS 3,273 822 3,072 845

Mark to market interest rate swaps 25 8

Unamortised swap gain (2) (2)

Unamortised fair value of debt recognised on acquisition 30 32

Current/deferred tax (1) -

Real estate transfer taxes 265 280

EPRA Net Reinstatement Value (NRV) 3,590 899 3,390 930

Real estate transfer taxes (265) (280)

EPRA NAV 3,325 833 3,110 853

Intangible assets (20) (23)

EPRA Net Tangible Assets (NTA) 3,305 828 3,087 847

Intangible assets 20 23

Mark to market of fixed rate debt (98) (94)

Mark to market interest rate swaps (25) (8)

Current/deferred tax 1 -

EPRA NNNAV /Net Disposal Value (NDV) 3,203 803 3,008 826

Secured development and University Partnerships pipeline

Target delivery

Secured beds

Total completed value (£m)

Total development

costs (£m)

Capex in period (£m)

Capex remaining(£m)

Forecast NAV remaining (£m)

Forecast yield on cost

Traditional development

First Way, London 2020 678 132 103 10 22 12 6.0%

Artisan Heights, Manchester 2020 603 82 57 12 6 11 7.8%

Derby Road, Nottingham1 2023 620 64 48 1 46 16 8.0%

Wyvil Road, London1 2023 270 100 80 - 62 21 6.2%

Abbey Lane, Edinburgh1 2023 298 33 24 1 23 9 8.3%

Total traditional development 2,469 411 312 24 159 69 6.9%

University Partnerships

White Rose View, Leeds 2020 976 122 84 17 8 14 7.4%

Middlesex Street, London 2022 913 277 187 57 86 52 6.0%

Old BRI, Bristol 2022 416 57 43 3 19 7 6.2%

Temple Quarter, Bristol1 2023 596 85 67 1 65 18 6.2%

Total University Partnerships 2,901 541 381 78 178 91 6.4%

Total pipeline 5,370 952 693 102 337 160 6.6%

1. Subject to planning consent

34

leading the sector six months ended 30 june 2020 interim

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